April Interest Rates Remain Low

Interest rates have remained low even after the Fed ended its Mortgage Backed Securities (referred to as MBS) purchase program on March 31, 2010. In a knee jerk reaction, interest rates initially increased by roughly .25% in early April but they have now settled back down to the nice, low levels of the past several months. The worldwide demand for MBS has remained strong even without the Fed purchases which have kept interest rates low. The massive debt problems in Greece and several other European nations have caused many worldwide investors to move their bond money over to US MBS which they still view as a safe haven. Interest rates will inevitably rise back to “normal” levels in the not so distant future but for now we continue to enjoy some of the lowest rates in history.